Weird experience with Options House

Discussion in 'Options' started by drcha, Aug 25, 2009.

  1. drcha


    I have a small account that I just opened recently with this firm. I thought that since they have a flat rate for any number of contracts, it might be a good place to trade calendar spreads.

    To open the account, I transferred a mutual fund into it. I then sold some of the shares of the fund last Friday. It's a small cap fund, and the RUT was rising pretty nicely that day.

    I got a phone call and email from OH saying that I had placed the order after market close and that it would therefore be executed on Monday (when the RUT was falling).

    For those who may not know this, mutual fund trades don't trade intraday; trades placed prior to the close are executed at that day's closing price.

    I responded that they were mistaken, and said that I had placed the trade well before the close, and told them that I wanted the Friday closing price, not the Monday closing price. I had no way to prove this, since there's nothing on the site that gives you the date and time of an order that hasn't been executed yet. Maybe they give you a popup that says your trade was accepted or recognized or something, but I did not print it out.

    Upon doing some additional research, OH discovered that I was correct. Their explanation was that mutual funds are not their specialty and that something got messed up with the trade. Since it was too paperwork-intensive for them to give me the Friday price, they called me and offered me some commission-free trades to cover the difference in price. I accepted this.

    I'm not sure whether to be impressed that they called me, explained the problem and followed up on it, or annoyed that they screwed this up. I don't have time to print off every trade with the time and date. I've never had anything like this happen before, with mutual funds or anything else. In the past I've used Brown, Etrade, and Scottrade, and now I use IB and MB Trading.

    I'm curious as to what others think. I don't have enough experience with this firm yet to evaluate them otherwise.
  2. I cannot speak with reference to mutual funds trades, but in general a broker that accepts responsibility for an error or mistake and offers rebates to make up for it is hard to find. I wanted to switch over to OH but heard they don't offer accounts to Canadians :(
  3. Whats the catch. It seems those commissions are quite cheap.

    Somewhere there is some catch.
  4. spindr0


    I would not be impressed by their calls, explanations, etc. They fouled up. It's their responsibility to execute trades properly and clean up the mess when they don't.

    I don't like the paperwork is too extensive excuse for not settling their mistake properly (eg. a cash credit posted to your account). What leeway do you have if you make a bad trade??

    I don't like the free trades as a settlement unless they give you some extra trades as a bonus. I don't know how discount brokers operate but many firms have a bad trades account for such situations.

    I ritually screen capture my tranaction pages from IB every day. It's most likely a waste of time until that infrequent day when there's a discrepancy - and I have been there in the past.
  5. I've used optionshouse in the past. Don't have really anything negative to say about them except their platform is barebones (no standalone software) and you can't trade some stocks (especially OTC). This was a couple years ago from what I remember. They are a small firm and will give you individual attention, though they might not get everything right on the first try.
  6. johnnyc


    given that they're called options house I wouldn't expect them to be the best place in the world for mutual fund trades. did they give you the option of taking the closing price you were due or the free trades? either way sounds like they were honest about the mistake and willing to try to make up for their error, which a lot of places won't do.
  7. SForce


    I've never traded mutual funds with OH so maybe it is different for those, but every trade (all are option trades) are logged and sitting in that bottom window labelled "Orders". From my first trade up through the one that expired at close today. The only thing I dislike about the orders window is it runs on central time since that is the time zone they are in.
  8. SForce


    There is (as of last week) only one catch and it is only on index options. The exchange fees for those 5 or 6 index options are now passed through where as they didn't used to be. I don't trade index options so I could care less. I've never seen any exchange/per contract whatever fees. No catch.

    This has been discussed in multiple threads here on ET. Search and read.
  9. MTE


    The catch is that they get the order flow for their market making business.
  10. drcha


    It wasn't clear to me whether I could insist on the closing price. I did not bother. We are not talking about a huge sum--it's more the principal of the thing, and the question in my mind as to whether I should be using them at all.
    #10     Aug 26, 2009